Best of the Blogs: Four reasons to support fair tax

Saturday

Apr 26, 2014 at 5:00 PM

Soon, the House and Senate will vote on whether they should put before the voters an amendment to the Illinois Constitution that would allow for a graduated income tax. They should do so in order to let the voters change this antiqued, inefficient and unfair system.

The graduated tax assesses different tax rates on different amounts of income. For example (and this is just an example — the actual rates will be different), the tax on the first $25,000 might be 1 percent, 2 percent on the next $25,000, and so on until you cap it out (i.e. 10 percent for incomes over $250,000). All people are treated by the same rules, but income is taxed at different levels.

Why?

1. It’s up-to-date. The reality in our modern world is that some people have a lot more income than others. Those doing well not only can afford to pay more, they should. They are benefiting more than most from civil society — infrastructure to move their goods, schools to educate their workforce and customers, police to protect their property, etc. The alternative — to raise taxes on the middle class — is just not tenable in these times.

2. It works. The federal government, most states and most countries use a graduated income tax for a good reason. Without a graduated income tax, states pass the costs of government onto cities, counties and school districts who have to raise property taxes and sales taxes instead. Property taxes are a horrible way to raise funds. As home values in struggling places go down, taxes have to go up, making the community even less attractive to homeowners. It’s a downward spiral. Sales taxes are no better. The poor and middle-class, who spend more of their income, wind up paying a higher tax rate than the rich. Under a graduated system, many Illinois residents will see their state income tax rate go down, many will pay about the same, and a few will pay more.

3. It’s fair. Everybody pays the same rates on each level of income. Property taxes and sales taxes are actually regressive. Having a progressive, graduated income tax evens out the tax burden more fairly.

4. Finally, it is honest. America clings too closely to the myth of individualism. The truth is that we are bound together — in our past, our present and our future. Our success is never a given. It’s fragile and contingent, partly on luck. Any of us could find ourselves needing help — an illness or accident, a turn in personal fortune, a twist of fate. By asking those who are doing well to pay more, and those who are having hard times to pay less, we honor the truth that we are not fully in control of our lives or our fates. We are neighbors, not strangers.

Our state is unable to pay its bills. They are passing on the costs to cities, school districts, social service providers, doctors, hospitals and universities. Even if we cut out every dollar of waste, there still wouldn’t be enough money to pay the existing bills, let alone invest in things that work to improve the economy in the short and long term such as research facilities, infrastructure, preschool for all, community policing, community colleges, public health programs, internet access, wilderness protection and consumer safety.

Unless you want to pay higher property taxes, higher sales taxes and receive fewer services, urge your local legislator to approve the fair tax bill, and vote yes when it appears on the ballot.

Matthew Johnson, senior minister at the Unitarian Universalist Church, contributes to the Next Rockford blog.